Working Papers, Federal Reserve Bank of Boston 14-7
Importing foreign nurses has been used as a strategy to ease nursing shortages in the United States. The effectiveness of this policy critically depends on the long-run response of native-born nurses. We examine how the immigration of foreign-born registered nurses (RNs) affects the occupational choice and long-run employment decisions of native RNs. Using a variety of empirical strategies that exploit the geographical distribution of immigrant nurses across U.S. cities, we find evidence of large displacement effects - over a 10-year period, for every foreign nurse that migrates to a city, between one and two fewer native nurses are employed in that city. We find similar results at the state level using data on individuals taking the nursing board exam - an increase in the flow of foreign nurses significantly reduces the number of natives sitting for licensure exams in the states that are more dependent on foreign-born nurses compared to those states that are less dependent on foreign nurses. Using data on self-reported workplace satisfaction among a sample of California nurses, we find evidence suggesting that some of the displacement effects could be driven by a decline in the perceived quality of the workplace environment.